In a similar fashion to the rising costs of coal, electricity, oil, and transportation, over a dozen small ammonium bicarbonate enterprises in Shaanxi have experienced significant differentiation. Under the current circumstances, some companies that have clung to the "iron rice bowl" system are now burdened with heavy debt. Even those that have undergone privatization but failed to innovate in products or business strategies are struggling just as much. Only those companies that have implemented both institutional reforms and product innovation have emerged as winners in this round of competition.
To achieve long-term growth, an enterprise must pursue two key innovations: institutional reform and product development. Institutional innovation helps streamline operations, standardize management, boost efficiency, cut waste, and maximize resource utilization. Product innovation, on the other hand, transforms the company's product and business structure, reduces market risks associated with a single product, and enhances profitability. These changes enable companies to move toward sustainable and even leapfrog development.
Many ammonium bicarbonate companies today are facing survival challenges, with some even believing that "closure is the only solution." The main reason for their struggles is their reliance on a single product, which does not align with the direction outlined in the "Eleventh Five-Year Plan" for the fertilizer industry. Therefore, adjusting the product structure and implementing product innovation has become the essential strategy for survival.
This trend is not limited to Shaanxi’s small ammonium enterprises. It is also evident in companies like Hebei Kaiyue Group. Originally a small nitrogen fertilizer producer with an annual output of 320,000 tons of ammonium bicarbonate, Hebei Kaiyue recognized the market risks of its single-product model and the inefficiencies of state-owned enterprises. The company made a bold decision to reform and establish a joint venture focused on alcohol production. Today, its methanol production capacity has reached 400,000 tons per year, and it produces 100,000 tons of dimethyl ether annually, making it one of China's largest alcohol ether producers. The company is currently building two more dimethyl ether plants, each with a capacity of 500,000 tons per year, aiming to become a world-class alcohol ether production base. Once operational, the company’s annual output value is expected to exceed 5 billion yuan.
It is hoped that the hundreds of struggling small chemical fertilizer companies across the country will find new hope for survival and take decisive steps toward institutional and product innovation as soon as possible.
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